Coming Soon: Corporate Tools To Hollow Out National Sovereignty

Most corporations don’t care about things like changing the name of a high school that honored a Confederate General. On topics like these, they allow democracy to do its job in its messy manner that is so dear to us. But when it comes to regulations, taxes, subsidies, and other goodies, they try to control the agenda.

They put lawmakers more or less indirectly on their payroll, and if that doesn’t work, they add extortion – with splendid results. For example, the Washington State Senate just passed legislation that would hand Boeing $9 billion in tax subsidies. And then there’s the revolving door through which industry insiders circle in and out of government agencies until the industry dominates the agency that is supposed to regulate it. A victory called regulatory capture.

But there’s another strategy, vastly more effective. It offers what no other strategy has yet accomplished: transferring national sovereignty to multinational corporations. Zany conspiracy theory? I wish. Trade agreements.

Free trade, say between the US and Japan, would be a good thing. For the Japanese, “free trade” has meant a one-way affair of unlimited exports, while insurmountable administrative barriers block imports. US automakers have complained for decades that Japan remains the most sealed-off market in the world. Cracking it open would benefit US industry and Japanese consumers.

Enter the Trans-Pacific Partnership, a trade agreement currently being negotiated between 12 countries – the US, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam – representing 800 million people, a third of world trade, and nearly 40% of the world economy. It’s the companion piece to the Transatlantic Trade and Investment Partnership (TTIP) between the EU and the US, also on the negotiating table. This is a worldwide phenomenon.

The White House is pushing it. Negotiations should resolve “all outstanding issues” by the end of the year, they hope. Goal: “The deepest and broadest possible liberalization of trade and investment.” Its “high ambition and pioneering standards” would be “a model for future trade agreements.” The Wall Street Journal can’t wait for it to be implemented. Last week, the New York Times Editorial Board has endorsed it.

Alas, the agreement deals with trade only on the margins. It has been negotiated behind hermitically sealed doors, undemocratically, without public oversight, beyond the reach of Congress. Yet more than 600 corporate insiders and lobbyists reportedly have access to the negotiators and dominate the agenda. And signatory countries would have to adjust their own laws to the agreement.

“A corporate Trojan horse,” Lori Wallach, director of Public Citizen’s Global Trade Watch, called it. “The agreement has 29 chapters, and only five of them have to do with trade. The other 24 chapters either handcuff our domestic governments, limiting food safety, environmental standards, financial regulation, energy and climate policy, or they establish new powers for corporations.”

Despite the mantel of total secrecy, some draft sections were leaked, including the provisions that would hand corporations a new tool to hollow out national sovereignty and make a mockery of democratic processes. The tool? “Investor-state dispute settlement” (ISDS).

If regulations, such as on tobacco, hamper in any way a foreign investor – the multinational corporation – in maximizing its profits, it can sue the country for damages that would include lost profits and “expected future profits,” however imaginary they might be, the Electronic Frontier Foundation reported. Only the sky would be the limit for fees and damages, and taxpayers of that country would be forced to pay that unlimited amount to the multinational corporation. These kinds of lawsuits would become corporate profit centers in their own right, funded by taxpayers.

But since domestic courts can’t be entrusted with administering such a harebrained lawsuit, the provision imposes a new court, composed of three private-sector lawyers who take turns flip-flopping between being judge and corporate advocate. “Kangaroo court,” the EFF calls it. A perfect solution for corporations. Forget judicial independence.

And “a model for future trade agreements,” the White Houses called it.

Budget-strapped countries would face corporations with nearly unlimited means. Proceedings can be dragged out by the lawyers however they see fit. Fees would pile up. Even if the country prevails, it would have to pay court costs and lawyers’ fees, plus compound interest. Then there is the large probability that the kangaroo court would rule against the country and impose humongous damages – to the tune of current and “expected future profits,” however imaginary they may be.

There is no way to appeal the decision. That kangaroo court could rule that the country would have to pay the corporation damages and fees in amounts that would bankrupt the country, and there would be no chance of getting this idiocy overturned. Given these risks, countries might give in without a fight – and forgo adopting or enforcing laws that, for example, protect consumers, workers, or the environment, or that govern intellectual property. It could further delay generic drugs. Financial reforms, ineffectual as they have been, would be rolled back. Bankers would be turned loose.

So far, based on similar provisions in other trade agreements, oil companies have attacked environmental protection regulations, tobacco companies have attacked health-related tobacco laws, pharmaceutical companies have attacked patent laws….

“High ambition and pioneering standards” is how the White House hyped it.

Among the goodies: a ban on buy-local procurement rules and a number of new rights for corporations. Some would allow corporations “to enter other countries and take natural resources,” as Ms. Wallach pointed out. They’d have a right to mine and a right to drill for oil and gas, even without government approval.

Internet freedom is a big target of the TPP in the leaked intellectual property chapter. Last year, the infamous SOPA, the Stop Online Privacy Act, caused a popular uproar in the US, supported by some of the biggest internet names, such as Wikipedia and Google, and was successfully derailed. But now it’s back, through the backdoor of the TPP. “Think about all the things that would be really hard to get into effect as a corporation in public – a lot of them rejected here and in the other 11 countries,” Ms. Wallach said. “And that is what’s bundled in to the TPP.”

So where is Congress?

It has exclusive constitutional authority over foreign trade and could scuttle the TPP. Hence corporate efforts from get-go to curtail that authority. Unimaginable in a democratic country: Lawmakers weren’t even allowed to see the draft text! Not until after 150 of them – why only 150? – had conniptions and badgered the administration.

Then in June, they were finally granted very limited rights to look at the draft texts. Now, “members of Congress, upon request for a particular chapter, can have a government administration official bring them that chapter,” said Ms. Wallach. “Their staff is thrown out of the room. They can’t take detailed notes. They’re not supposed to talk about what they saw. And they can, without staff to help them figure out what the technical language is, look at a chapter.”

The Obama administration and Corporate America are trying to keep Congress out of it. And Congress, compromised by corporate interests and physically addicted to corporate money, is considering abdicating its authority over foreign trade. Instead of debating and then modifying or scuttling the TPP when it finally is allowed to emerge from the veil of total secrecy, Congress is considering granting the Obama administration “Fast Track Authority.”

The administration has been furiously pushing for it. It would give the US Trade Representative the power to bind the US to the TPP without further debate in Congress. The TPP would be a done deal, corporate interests would replace many of our laws, taxpayers would be on the hook, and to heck with democracy.

There was a smidgen of good news, Ms. Wallach said. “The reason there isn’t a deal is because a lot of the other countries are standing up to the worst of these US corporate-inspired demands.”

If you’re not at the table, you’re on the menu. Clearly taxpayers and citizens are not at the table. They’re on the corporate menu. Only a few chapters of the TPP have been leaked so far. They’ve been revelatory. There are many hidden jewels within the chapters that haven’t been leaked. And by the time we find out just how subversive the TPP is, to what extent it shifts the power from “we the people” to corporate interests, and what price we have to pay financially and in a myriad other ways to accommodate these corporate interests, it may be too late – with the connivance of Congress.

Alan Grayson, Democrat from Florida, one of the 150 lawmakers who helped jar the draft text loose, lamented the ongoing secrecy: “I can tell you, it’s very bad for the future of America,” he said. “I just can’t tell you why.”

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